The retail industry is facing significant challenges as consumer behavior adapts to changing economic conditions. One concerning statistic revealed at the Retail Day LATAM event held at the Buenos Aires Convention Center was a 15% decline in sales volume at large chains in April compared to the previous year, reflecting a general downturn in consumption.
Food supply companies, supermarkets, and market analysts gathered to discuss the challenges facing the industry. Osvaldo del Rio, president of consulting firm Scentia, attributed this decline to a 13-14% drop in income in the first quarter. Projections for the rest of the year do not look promising, with estimates suggesting a 9% year-on-year decrease in mass consumption. Inflation, though slowing down, still exerts pressure on prices and wages, making recovery difficult for consumers.
In response to these economic challenges, brands are offering more products at lower prices to gain market share. Consumers are gravitating towards cheaper options or smaller quantities of leading brands as they prioritize essential purchases over product categories that are being sacrificed. Javier González from Nielsen IQ reported that sales in large chains have seen an average decline of 18% in the first three months of the year due to consumers being more selective in their purchases and reducing discretionary spending as they adapt to changing economic pressures affecting household budgets.
